Why has Austrian giving failed to recover since the recession?

Giving in Austria has struggled to recover from the recession – image by Miroslav Petrasko via Flickr

Austria is a generous country, but the evidence suggests that the recession of 2008 has had a deeper and longer lasting effect on charitable giving than has been seen in almost all other wealthy nations.

I recently travelled to Vienna, Austria to speak to a large and highly engaged crowd at the annual “Spendentag” (Donation Day) about CAF’s global research and policy work. Held at the Diplomatic Academy of Austria the theme of the conference, which was organised by Fundraising Verband Austria) was the “Future of Civil Society”.

The title of my presentation was “A global view of giving trends” and in 45 minutes I managed to cover trends in the World Giving Index and many of the themes in the Future World Giving project including the potential for middle class growth to drive philanthropy around the world, the need for governments to build trust in charitable giving, recognise the right for not-for-profits to campaign and ensure that it is easy for donors to give tax effectively.

One of the most interesting aspects of my trip to Vienna (apart from the discovery of currywurst) was a discussion that I had with Dr. Kai Unzicker of Bertelsmann Stiftung. Dr. Unzicker presented the findings of Bertelsmann’s Social Cohesion Radar, an index covering 34 EU and OECD countries that tracks 3 “dimensions” each containing 3 measures (as shown below).

Bertelsmann’s Social Cohesion Radar, Bertelsmann Stiftung

In talking Dr. Unzicker after our session, we noted the consensus between the World Giving Index and The Social Cohesion Radar measure of “Solidarity and Helpfulness” which is derived by asking people to what extent they agree that “people feel responsibility for others and are willing to help them”. Interestingly, the high performers in the World Giving Index such as the USA, Australia, UK, Ireland, Netherlands, Canada and New Zealand all score highly for Solidarity and Helpfulness and there is consensus between the two studies on low scorers such as Greece, Bulgaria and Hungary too.

Perhaps the most compelling agreement between the two studies of generosity to others is in some surprising and negative trends. Given that we were in Vienna, we naturally focussed on the fact that Austria had seen a sharp fall (from 69% in 2008 to 52% in 2012) in giving money to charity according to the World Giving Index. That fall has been mirrored in the Solidarity and Helpfulness category of the Social Cohesion Radar suggesting that it is a sign of a wider societal trend. Delegates at the event suggested that overall donations had remained stable, perhaps indicating that declining numbers of donors were giving more to make up for the shortfall. But this Austrian “civic core” cannot hide the fact that Austria has seen the 5th largest drop in percentage points in the world since 2008 and the largest of any rich nation (see below).

The 10 largest decreases in giving money to charity since 2008 according to the World Giving Index

Until the most recent World Giving Index (2013) Austiran engagement in giving seemed to be following the global trend. Following the recession of 2008 global giving (incorporating giving money, volunteering time and helping a stranger) witnessed a “double dip” recession in line with a similar pattern in global economic growth (see image below). What marks Austria out as unusual is that the number of people giving money to charity has not seen a recovery in 2012.

World Giving Index and GDP growth 5 year trend

I can only speculate as to the reasons for this plateauing of giving. Firstly I should point out that 52% of people giving money to charity still makes Austria a very generous country. Nevertheless, a drop of 17% percentage points in 5 years is dramatic. It may be that Austrians are more circumspect about the prospects for future economic growth than other nations and that this lack of confidence in the economy is having an adverse effect on giving.

In any case, I found my trip to Austria fascinating and I would welcome your explanations for this apparently worrying trend.

FWG1 – ‘Unlocking the potential of global philanthropy’

Our first report aims to estimate the possible extent of charitable giving around the world if governments and the voluntary sector were to harness the potential of the huge expansion of the middle classes.

FWG2: Building Trust in Charitable Giving

Future World Giving: Building Trust in Charitable Giving

FWG3: Enabling an Independent Not-For-Profit Sector

‘Future World Giving: Enabling an Independent Not-For-profit Sector’ warns that poor legislation on not-for-profit campaigning and independence could jeopardise efforts to promote giving among new generations of middle class people emerging across the world, which otherwise could contribute up to $224 billion a year to good causes by 2030.

FWG 4: Donation States: An international comparison of the tax treatment of donations

Comparing the tax incentives on offer for giving and the system through which they are offered in 26 nations.